I read this article from one of my colleagues with the National Association of Productivity and Professional Organizers and it fits into the CRS preaching about putting your “LIFE DOCUMENTS TOGETHER”. You will always need it! Here is proof! Read below.
When someone commits fraud, you feel violated. And, in fact, you have been. But the nightmare doesn’t stop there. If not properly prepared, you and your staff could spend hundreds of hours making calls, canceling credit cards, working with attorneys, and spending thousands of dollars to regain control.
As critical as it is to be prudent in trying to prevent attacks, it is equally important to know how to mitigate the effect once you’ve been victimized. Having what I call a “life inventory” of everything important to you, defines the universe of your assets and liabilities. It allows you and your advisors to be able to evaluate areas of potential weakness and also allows all parties to quickly respond to fraudulent activities when they occur.
Identity fraud is the most common form of fraud, with credit card fraud being the most prevalent type. According to the FTC, identity fraud has increased 73% from 2019 to 2020 and is rising. Per a joint study by Experian and the Department of Justice, affluent individuals are 43% more likely to experience identity fraud.
The documents most used include driver’s licenses, government benefits, passports, and credit cards. Fraudsters no longer require physical documents. They hack into corporate servers, using information obtained through a method called “imposter fraud,” which is when someone calls the victim, pretending to be a representative of a company, charity, or bank, gaining the personal information needed.
Misappropriation of assets is also prevalent in high-net-worth families. Live-in staff and personnel with access to the homes put these families at a higher risk. Misappropriation differs from theft; it occurs when a trusted person, presented with an existing opportunity over time, abuses the family’s assets for personal gain, as opposed to a thief that knowingly enters a home for the express purpose of stealing. While due diligence and background checks is critical, instantly being able to prove ownership of missing possessions is paramount.
Having an inventory quickly helps address these types of crime.
Ranked in order of fraud risk, a life inventory has four categories: Digital Assets, Credit Cards and Financial Information, Critical Documents, and Physical.
Published by: Carol R. Kaufman
Founder/CEO
Pinventory, LLC, Hawthorne, NJ
Frank Casey, one of the two Madoff whistleblowers, asked me to write an article about how having an inventory of your important items certainly won’t prevent fraud but will, in fact, mitigate the risk and the ultimate effects of such an occurrence.
This article, “CYA – Cover Your Assets (When Dealing with Fraud)”, was published in Family Office Magazine on April 5, 2022. One of the two Madoff Whistle blowers asked Carol to write this article.